Goldman Sachs Faces Civil Fraud Charges

Posted By
The Gilbert Law Group

Here we go again. Another Wall Street giant has been accused of defrauding
its investors. Goldman Sachs & Co., a global investment banking and
management firm, allegedly failed to disclose conflicts of interest in
mortgage investments it sold during the failing housing market. Fabrice
Tourre, a Goldman Sachs vice president, has also been charged by the SEC
for his involvement. The Securities and Exchange Commission announced
the charges last Friday.
According to Marcy Gordon with the Associated Press, Paulson & Co.
is the Goldman Sachs client being investigated. The AP identifies Paulson
as “one of the world’s largest hedge funds” and reports
them as having paid Goldman approximately $15 million in 2007 for structuring
the deals. Losses by investors reportedly exceed $1 billion.
The SEC allegations suggest Goldman failed to disclose to investors that
Paulson & Co.
played a part in selecting mortgages and were in a position to profit
from the waning mortgage values. Investors were told an independent, objective
third party selected the securities.
The Goldman Sachs website reported the following statement today: “The
SEC’s charges are completely unfounded in law and fact and we will
vigorously contest them and defend the firm and its reputation.”
We will follow the saga and continue to report on it.